Indian tourism industry, still struggling to recover from the aftermath of September 11 terror strikes and last year's near-war like Indo-Pak standoff, is about to face another slump due to the outbreak of US-Iraq conflict.

Although the existing holidaymakers are not in a hurry to pack their bags for their homelands, potential tourists are avoiding trip to the Indian subcontinent because of the Gulf war.

"The tourism industry is the first to be hit in such cases. People not just avoid the warring countries but also their neighbouring countries. But in the case of Gulf war the media has also hyped the danger in the subcontinent," says I S Wahi, president, Indian Association of Tour Operators.

"There is no panic due to the Gulf war in our country. Definitely there will be an overall effect on tourism sector across the globe but to assess its effect in India we should wait for some more time," says Rathi Vinay Jha, secretary, Ministry of Tourism.

However, industry experts say that even before the war on Iraq began, travellers from the US and Europe started cancelling their plans to visit the subcontinent.

"With the outbreak of hostilities in the Gulf region, the domestic tourism industry should brace itself for some hard days ahead. The in-bound tourist inflow from European countries can fall by 50 to 60 per cent in the first few weeks of the outbreak of the war," says Subhash Goyal, chairman, Stic Travel Group companies.

Even after that the impact on tourist arrival to India would depend on the extent to which the war is fought, adds Goyal.

According to industry experts, India receives about 2.5 million visitors every year, of which 30 per cent are tourists and about 90 per cent of these tourists are from US and other European countries.

India's tourism industry is estimated to have lost more than $200 million since the terror attack in the US.

"Ever since the threat of war started, travellers from the western countries began cancelling their plans because they had to fly close to the battle zone to reach India and as a result the occupancy rate in most of the hotels has decreased by about 40 per cent," says Lalit Suri, chairman and managing director, Intercontinental Hotel.

Echoing similar sentiments about the possible effect of the Gulf war on India's travel and tourism industry, aviation ministry officials say that the travel industry has estimated that about 30 per cent of tourists coming to India will cancel their visits and flights to Europe and the USA will be the most affected.

"This war is not good for the Indian tourism and aviation sectors as it has the potential for breaking the financial backbone of our national carrier airlines," they add.

However, there is hope for the industry as the war has started during this time of the year, which is traditionally considered as the low season for India in the global tourism market.

"The fall out of the Gulf War will be cushioned as it is a lean tourist season right now," says Goyal who feels most of the damage has already been done by months of uncertainty over the Iraq war.

About the strategies that are now being adopted to combat the effect of war on this industry, experts say that the main emphasis will be to boost domestic travel and promote tourism from South-East Asian countries.

"Keeping in mind the war like situation in Gulf we are concentrating more on domestic tourism and we have also done our marketing exercise in neighbouring countries like Singapore, Thailand and Malaysia to promote India as a probable tourist destination," says Wahi.

"Even if there is 100 per cent loss from the US tourist market during this war, we feel that these South East Asian countries would stand by us to help escape without too much damage," Wahi adds.